Gibraltar QROPS denial a waste of time and
effort
19 November 2009
HMRC is wasting time and effort by continuing
to deny Gibraltar as an acceptable Qualifying Recognised Overseas Pension
Schemes (QROPS) jurisdiction, says London & Colonial.
The pension and investments specialist said the effort that HMRC is wasting
on its delayed acceptance of the jurisdiction is to ‘no useful purpose’.
“I have had dealings with HMRC in various capacities for over 40
years,” commented Ken Wrench, chief executive at London & Colonial.
“In the past I have always had helpful explanations and discussions
that have assisted understanding of policy and practice. In turn we in
the industry have generally been able to formulate our various products
and practices to reflect, and in some cases anticipate, the intention
of HMRC and the policymakers. It is very frustrating that on this matter
HMRC will not meet with anybody or explain let alone discuss their objectives.”
Gibraltar QROPS providers have been in contact with HMRC since the spring,
and have raised issues regarding compliance with the UK’s QROPS
regulations – the disagreement now reportedly focuses on Gibraltar’s
policy of taxing residents on their pension income. However, London &
Colonial said HMRC has failed to explain why this could have any consequence
for the UK in general, or for the Treasury.
“One wonders if there is some hidden agenda. Whatever tax is or
is not paid by Gibraltar residents will make no difference to the tax
paid to HMRC by QROPS members who are UK resident. So why are HMRC being
difficult and delaying their agreement to QROPS in Gibraltar? If it is
simply their interpretation of the letter of the regulations then it is
about time either that they agree that a favourable interpretation is
acceptable or that the regulations were changed. Gibraltar is an ideal
jurisdiction for QROPS – it is within the EU, it is very well regulated,
the currency is Sterling, the language is English and the common law legal
system is similar to the UK,” added Wrench.
He said HMRC’s assertion that the tax basis for residents in Gibraltar
is inconsistent with the QROPS regulations because it not part of a progressive
tax system. “If they intend to maintain that assertion they really
should state their authority for such an interpretation – our legal
advisers do not believe that such an authority exists. Meanwhile, business
is being held up and prospective scheme members are being denied the options
and benefits to which we believe they are entitled – and for no
good reason,” Wrench concluded.
